With a hope to meet the Rs 40,000 crore revenue budget, the Central government on Monday begun the auction for the 2G spectrum.
Five bidders, namely, Bharti Airtel, Vodafone, Idea Cellular, Telenor and Videocon are bidding for the GSM (Global System for Mobiles) airwaves.
There are no bidders for the CDMA (Code Division Multiple Access) airwaves with Tata Teleservices pulling out of the auction last week.
The cancelled permits included Uninor's 22 licences, Loop Telecom (21), Sistema Shyam (21), Idea Cellular including Spice Communications (13), Videocon (21), Etisalat DB formerly Swan Telecom (15), S-Tel (6) and Tata Teliservices (3 CDMA licences).
Instead of auctioning entire spectrum freed from cancellation of licences, the government is auctioning a maximum of 11 blocks of airwaves frequencies in each circle, barring Delhi and Mumbai where there are only eight blocks, to attract high price for spectrum.
The apex court had allowed the companies, whose permits were cancelled, to get spectrum reallocated for continuing their business if they win rights for the airwaves frequencies in the auction.
The government has fixed starting price for spectrum in the auction at Rs 14,000 crore for 5 Mhz of GSM spectrum on pan-India level which is around 7 times more than the price of Rs 1,658 crore at which telecom companies were given pan-India permits between 2001 to 2008.